Cheque Images

 

 

 

• Frequently Asked Questions – Question Listing

   

• What is Cheque Imaging? 
• When will the change be implemented to upgrade to imaged cheques?
• Who does this change affect?
• Will the credit union store my original physical cancelled cheques? If so, for how long?
• Will I still receive a paper statement?
• What are the benefits of cheque imaging for me?
• What can I do to maximize the image quality of my cheques?
• Why is the credit union implementing electronic cheque imaging?
• What is the Canadian Payments Association (CPA)?
• Do other countries perform cheque imaging and how do Canada’s new specifications compare?
• How will the cheque images be presented?
• Do all the cheque images represent transactions through my account?
• Are cheque images legal representations of physical cheques?
• Can I get images of my deposit slips?
• Can I get images of my deposited cheques?
• Can I still use cheques?
• What should I do now?
• What are the benefits to the credit union from implementing electronic cheque imaging?
• Will any processes for cashed cheques be required for business?

Frequently Asked Questions – Detailed Responses

 

 

 

What is Cheque Imaging?

Cheque imaging is a process whereby electronic images of cheques are captured at the time the cheque is processed through the cheque clearing system. Members will continue to write, deposit and negotiate cheques in the same way, but will no longer receive original physical cheques. The processing center of the financial institution receiving the cheque will capture the amount, the electronic ‘codeline data’ at the bottom of the cheque and a digital image of the front and back of the cheque. This digital image (which will replace the actual paper cheque) will be sent to the institution that the cheque is drawn on and will be used for the purposes of clearing, fraud detection and confirmation.

This new method makes cheque processing more efficient by eliminating the practice of returning cancelled cheques and the need for financial institutions to send and store cancelled cheques. Cheques are destroyed after they have been imaged and verified. You can continue to write, deposit and negotiate cheques in the same way, but will no longer receive the physical cancelled cheques.

 

When will the change be implemented to upgrade to imaged cheques?

This change will take effect in your April 2012 statement that you receive in early May. Up until, and including the March 2012 statement, you will continue to receive cancelled paper cashed cheques inserted into an envelope with your printed statements.

 

Who does this change affect?

It affects members that currently receive a paper statement with their cancelled paper cheques enclosed.

 

Will the credit union store my original physical cancelled cheques? If so, for how long?

The credit union is no longer required to store the original physical cheques as a copy of the front and back of the cheques can be stored in an electronic archive for up to seven years. For a fee, you can be provided with a certified true copy of the front and back of a cheque upon request.

 

Will I still receive a paper statement?

Yes. You will continue to receive your paper statement as usual with the option of having your cheques printed and attached to the back of your statement. We are moving to a paperless statement delivery to control costs and improve our environmental performance. For more information on using MemberDirect to access your account information, call 902-226-2288 or visit the branch. Your statement and cheque images may be viewed conveniently at any time online through MemberDirect online banking.

 

What can I do to maximize the image quality of my cheques?

The image created depends on the quality and clarity of the information appearing on the cheques. If you complete them by hand, make sure to use black or blue ink. If you use a printer, choose an uppercase font of at least 12 points. We recommend using dark ink to ensure the printed information appears clearly on the cheque image.

 

Why is the credit union implementing electronic cheque imaging?

Canada’s system for cheque standards, processing, and clearing has been changing due to a new cheque image clearing system introduced by the Canadian Payments Association (CPA). The CPA spearheaded the work beginning in 2007 and it continues today on this mandatory industry-wide change to modernize Canada’s cheque-clearing system through image technology.

The CPA aims to have all cheques across Canada cleared using electronic cheque images instead of paper cheques. This modernization of traditional paper cheque clearing will ensure Canada keeps pace with other industrialized countries in the area of electronic clearing. More importantly, the move to cheque imaging will maximize the opportunity for processing efficiencies for both businesses and financial institutions.

 

What is the Canadian Payments Association (CPA)?

The CPA operates Canada’s national clearing and settlement systems; facilitates their interaction with other systems that do exchange, clearing and settling of payments; and assists in developing new payment methods and technologies. It promotes the efficiency, safety and soundness of clearing and settlement systems while considering the interests of users.

 

Do other countries perform cheque imaging and how do Canada’s new specifications compare?

The CPA’s initiative follows a migration to a worldwide electronic cheque-clearing process. The United States, France, Singapore, Hong Kong, Argentina and New Zealand are implementing a similar method of cheque processing.

 

How will the cheque images be presented?

The cheques images are presented on an 8.5 by 11 inch page. There is key information printed above each cheque including date, item and dollar amount.  They are sorted by clearing date.

For individual members there will be five images including the front and back of the cheque per 8.5 by 11 page, printed on both sides of the page. This is a total of 10 cheques per printed page. 

For business members there will be five images including the front and back of the cheque per 8.5 by 11 page, printed on both sides of the page. This is a total of 10 cheques per printed page.

 

Do all the cheque images represent transactions through my account?

Images are made available by the credit union as a service to you and the provision of such images does not mean the cheque or instrument has been processed or in any way oblige the Credit Union to honour or accept the cheque or instrument. Cheque images appear on your statement pre-sorted by clearing date. However, you may have an image for a cheque that was not cleared through your account; an example is a cheque returned due to insufficient funds.

 

Are cheque images legal representations of physical cheques?

Imaged cheques are legal documents and are acceptable as proof of payment by Canada Revenue Agency and in courts of law. If payment is disputed, an image of both the front and the back of the cheque may be required. Your credit union can provide these images including the back of the cheque, from their computer system.

 

Can I get images of my deposit slips?

No

 

Can I get images of my deposited cheques?

No

 

What are the benefits of cheque imaging for me?

With cheque imaging on your paper statement comes convenient access to your cheques, increased security and ease of filing.

 

 

 

With cheque imaging on your e-Statements you can enjoy even more benefits including:

 

 

• Less filing: Your e-Statements, along with the cheque images, are maintained online in MemberDirect in an organized, accessible, secure place for seven years. If you require paper copies, you may print them yourself or have your credit union print them for you. They will appear on a convenient letter-sized sheet, with several to a page, making them easier to file and store.

 

• Convenient, easy access: You can access your cheque images online on MemberDirect at work, home or anywhere you have secure computer access.

 

• set up direct deposit for your pay;

• pay bills online;

• use electronic transfers;

• use Interac Direct Payment.

 

• Increased efficiency: The process of scanning and electronically distributing cheques can be accomplished in a much less labour-intensive and more efficient way, thereby reducing staff hours dedicated to stuffing envelopes.

• Increased security: Cheques are encoded with your banking information. A thick statement envelope containing cashed cheques can easily be identified and stolen from unsecured private mailboxes. Electronic encoding and security protocols make electronic interception a greater challenge for fraudsters.

• Reduced waste: This initiative will reduce our overall environmental footprint in several ways, including: reducing paper and fuel consumption. An estimated 2.6 million* envelopes per year are used in Atlantic Canada to deliver statements to members. This change will encourage more people to switch to electronic statements, reducing the paper waste. As well, it will significantly reduce the overall weight of mail distributed, thus reducing the fuel required for distribution

• Control fees: We know our members do not want to pay excess fees. No one does! We constantly seek ways to improve the efficiencies in our system and control costs. This change will help us control costs and maintain competitive fees.

• Faster clearing cycle: A financial institution that accepts a cheque drawn on another institution often has no way of knowing whether the cheque may subsequently be dishonoured (e.g. due to insufficient funds, a stop payment order, or a forged signature). In today’s environment, if a cheque is dishonoured, the whole process of moving the paper cheque through the clearing system and rerouting it to the financial institution where it was deposited may take up to 5 to 7 business days. With cheque imaging, this time frame will be significantly shortened. To manage risk during this process, financial institutions may place a hold on the funds based in part on an estimate of the time the cheque may spend "in transit". With cheque imaging and faster processing times, financial institutions may be able to reduce hold periods.

• Reduced risk: The events of September 11^th, 2001 proved how a major incident can disrupt cheque clearing processes and risk affecting the stability of financial institutions. More common occurrences such as courier delays due to weather conditions can also affect clearing performance. An exchange based on electronic transmissions can be completed within minutes.

 

• bank reconciliation;

• cheque searches;

• internal reports and controls.